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Vallourec champions oil, gas in 2013

Keywords: Tags  Vallourec, oil and gas, earnings report, Philippe Crouzet, Thorsten Schier


NEW YORK — Vallourec SA remains positive about the oil and gas markets globally, but especially in the United States, in 2013.

"Drilling activity in the U.S. is expected to progressively pick up from current levels, while indicators for the global oil and gas markets are positive," Philippe Crouzet, chairman of the Boulogne-Billancourt, France-based steel tube and pipe maker’s management board, said in a statement released with 2012 earnings.

However, drill rig activity this year is expected to remain below the average level seen in 2012, the company said.

Oil country tubular goods (OCTG) prices have recently trended downward "in line with the market" (amm.com, Feb. 20), although orders remain good, the company said.

A strong performance by the oil and gas sector in 2012 was offset by "a challenging environment marked by economic uncertainty, lower demand and increased competition" in the company’s other end markets, according to Crouzet, leading to a 46-percent drop in Vallourec’s net income to €217 million ($288.36 million) from €402 million in 2011 despite a 1-percent increase in sales to €5.33 billion ($7.08 billion).

In the United States, the company benefited from a higher average drill rig count during 2012, as well as longer laterals of horizontal wells and more wells per drill rig, leading to a 14-percent increase in sales for that segment to €3.23 billion ($4.29 billion).

However, its non-energy segment—which includes mechanical, automotive and construction—saw a 21-percent decline in sales to €1.09 billion ($1.45 billion) due to lower industrial production in Europe and a slowdown in China, according to the company.

Volumes shipped in 2012 fell 7.1 percent to 2.1 million tonnes "primarily due to lower volumes in Europe."

North America was Vallourec’s largest market last year, with sales of €1.53 billion ($2.03 billion), 12 percent higher than in 2011.

For the fourth quarter, the company recorded net income of €70 million ($93 million), down 40 percent from €117 million in the same period a year earlier on sales that fell 6 percent to €1.47 billion ($1.95 billion).

Vallourec made the first deliveries of pipe from its new mill in Youngstown, Ohio, at the end of 2012. Finishing lines at the plant are expected to be commissioned in the second quarter, the company said.


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